Warner Bros. Soars on $82.7B Netflix Deal Amid Antitrust Storm
Shares hit 52-week high on acquisition news, but vocal opposition from lawmakers and industry groups signals a tough regulatory battle ahead.
Warner Bros. Discovery (NASDAQ: WBD) shares surged over 6% to a 52-week high on Friday after Netflix (NASDAQ: NFLX) announced a definitive agreement to acquire the company’s core film and television studios, along with the HBO and HBO Max assets, in a landmark deal valued at approximately $82.7 billion.
The cash-and-stock transaction sent WBD shares climbing to $26.08, while Netflix stock fell nearly 3% to $100.24 in a typical reaction for an acquirer taking on significant debt and integration risk. The deal promises to reshape the global media landscape but immediately faces a gathering storm of regulatory scrutiny and industry opposition that casts a shadow over its completion.
Under the terms of the agreement, Warner Bros. Discovery shareholders would receive $23.25 in cash and $4.50 in Netflix common stock for each WBD share. In a joint statement, the companies said the merger would combine Warner's iconic franchises like DC Comics, Game of Thrones, and Harry Potter with Netflix's vast global streaming distribution. "By combining Warner Bros.’ incredible library... with our culture-defining titles... we'll be able to do that even better," said Ted Sarandos, co-CEO of Netflix.
The acquisition is contingent on a significant corporate restructuring by Warner Bros. Discovery, which plans to spin off its Global Networks division into a new publicly traded company. This complex separation is expected to conclude in the third quarter of 2026, with the full Netflix merger anticipated to close within 12 to 18 months, pending regulatory and shareholder approval.
A Brewing Regulatory Battle
Despite the optimism from executives, the path to closing is fraught with challenges. The sheer scale of the merger, which would unite the world's largest streaming service with a major rival, has drawn immediate and bipartisan condemnation from Washington. Lawmakers are raising alarms about the potential for reduced competition, higher consumer prices, and diminished content diversity.
Senator Elizabeth Warren (D-MA) voiced concerns that the deal would create a "massive media giant with control of close to half of the streaming market." Similarly, Senator Mike Lee (R-UT) warned that increased Netflix dominance would signal "the end of the Golden Age of streaming for content creators and consumers," according to reports from CBS News. The Department of Justice is widely expected to conduct an extensive antitrust review.
Opposition extends beyond Capitol Hill. The Writers Guild of America, representing thousands of film and television writers, released a statement staunchly opposing the acquisition. The guild argued the consolidation would "eliminate jobs, push down wages, and worsen conditions for all entertainment workers" by creating a monopsony-like employer with outsized power over creative talent.
Cinema United, a global trade association for movie theaters, labeled the deal an "unprecedented threat" to the future of theatrical exhibition, fearing that a combined Netflix-Warner Bros. would prioritize streaming debuts over traditional cinema releases, further eroding a business still recovering from the pandemic.
Market Weighs Premium Against Uncertainty
The immediate jump in WBD's stock price indicates that, for now, investors are focused on the significant premium offered by Netflix. The company has a market capitalization of approximately $64.6 billion, and the deal represents a substantial payout for shareholders who have weathered a volatile period since the WarnerMedia and Discovery merger.
However, the pronounced skepticism from regulators and industry stakeholders creates a long-term risk profile for the deal. The 12-to-18-month timeline for closing provides a wide window for legal and political challenges to mount. As the initial euphoria fades, the market will have to weigh the certainty of the offer against the significant possibility that antitrust concerns could force the deal to be restructured or blocked entirely, leaving Warner Bros. Discovery to navigate a rapidly consolidating industry on its own.